The Importance of Having An Emergency Fund In your Life

Money is not the most important thing in our lives but needless to say we need it to survive this weary world. We work hard to sustain our needs and wants but we can’t work forever. As our old folks say, we only live once so we should make everything count! We need to live a valuable life and in order to achieve this we need to work hard and earn more nut what if your strength wavers and your body just can’t deliver anymore? That is when your savings and emergency fund would come in. You should be able to give some of your earnings and spare for savings and emergency fund. This well let you feel secured when you have some emergency fund when the need arises. In order to set up your very own emergency fund, you need to see the benefits of having one first. Check them out below for your reference.

An emergency fund is like a backup plan that will save you when you are faced with an unexpected phenomenon.

An emergency fund can be good for you during short term struggles such as waiting for the salary to come, sudden travel splurge, sudden purchase, or sudden eating out with friends or family. If you have an emergency fund, you are confident to face all these short term struggles when they come.

An emergency fund can also help you battle long term problems such as an unexpected illness you might have or any of your family (God forbids); natural calamities; loss of a job; loss of a loved one and any other untoward struggles that can cost you a lot.

We now know the importance of having an emergency fund in your life but do you know how to start your very own emergency fund?

First, you need to set aside at least 20% of your salary every payday for your emergency fund.

This money should never be used for unnecessary expenditures and you should vow to add more on this fund when you are able.

Spend money as a wise spender. Try to trim unnecessary expenses as this would make it hard for you to set aside for your emergency fund.

Have self-discipline when it comes to your finances. You need to stick to your budget and try to save more. Discipline starts from within and you are the only one who can help yourself when it comes to your finances.

Save all your spare change and unused budget all the time. Instead of buying snacks that will make you fat when you are already full, why not save them and add to your emergency fund. We all know that you could not make a dollar without a penny so any amount would help you achieve your goal.

Choose the simpler and less expensive options whether it be in food, clothing or whatever. Remember the quality of the good does not depend on the price alone. You should spend your money wisely and be frugal enough to achieve your goal and that is to save more for your emergency fund.

Lastly, consistency and dedication are the driving factors that would help you to be on top of your spending spree and would help you to save more for your emergency fund.